en fj wo no w j

PART 1 – PROJECT EVALUATION

Activity- 1 NPV

The projects cash flow over the next 10 years for a strategic projects is forecast in the table.

Evaluate both the sub-projects if the real discount rate is:

1. 3.5% 2. 7.5% 3. 19%

Document your response and discuss the choice of discount rate and its implication as an input for NPV evaluation

Activity- 2 NPV

For an operational project, please consider if the investment is worth proceeding by completing the table.

Activity- 3 Multi criteria analysis

Table 3, shows financial and non-financial outcomes from two strategic projects. Using the weighted criteria of 50:50 between financial and socio-economic impacts, please rank the two strategic-projects in Table 4 shown in the next slide

PART 2 – RISK ASSESSMENT

Activity 1 Quantitative risk assessment

For a strategic project, 8 summary activities are planned and the effect of 3 major risks on each activity is identified. (e.g. % means no effect, 10% risk impact means 10% add on to overrun is required).

Activity 1 Quantitative risk assessment